Verizon’s rumored plan may ensure you always have a new phone in your hands

Verizon may go the way of T-Mobile's JUMP! as soon as next month.

It looks like the days of waiting two years for your next handset upgrade might be over. DroidLife is reporting that Verizon may be introducing its own “buy a new phone if you’re sick of your old one” plan later next month. According to the site’s source, the plan is called VZ Edge, and it will enable customers to upgrade their phones more often than once every two years to help them “stay on the leading edge of technology.”

DroidLife cites a training slide, which offers details on the VZ Edge plan and how it can help customers avoid committing to a contract and upgrade fees by paying off a device over time. The slide isn't extremely specific, but it also mentions that customers who have committed to the recently announced monthly finance plan can upgrade their phone once they've paid off the other about halfway through.

From the looks of it, last week's T-Mobile announcement seems to have sparked a new trend among mobile carriers. The company introduced its new JUMP! Program, which allows customers to upgrade their phones twice every 12 months. DroidLife mentions that, in theory, one could actually upgrade more than that at Verizon if they manage to quickly contribute more than 50 percent to the cost of the phone. Regardless, we wouldn't be surprised if the other major US carriers began following suit with this business model.

I have a better idea: knock 40% off the "retail" price and just let people pay the price on the sticker.

The price of smartphone-like devices have been consistently going down over the last few years: I bought a 32GB, cellular-enabled Nexus 7 for $300, and yet my Galaxy S4 retails for $700.

When I compare the price of on and off-contract devices, I can only come to the conclusion that handset prices have been kept artificially high at the expense of the consumer. If you were actually paying what the device is worth, you'd probably be paying about $400 for a device like the SGS4.

If $400 is still too much, then extend financing to credit-worthy consumers and call it what it is: a loan. Once the loan is paid off, drop the loan payment off the bill.

My take is that once you pay off 50% of a phone you do not have to pay any more if you buy a new phone. I would assume that you have to give your old phone to Verizon so they can resell it. For example:

Buy a phone for $600 on January 1, 2014 and pay it off $50/Month.By July 1, 2014 you have paid 50% of the phone.On July 1, 2014 give Verizon your old phone and buy a new one for $600 and continue to pay $50/Month

This works for Verizon because they only pay half the retail cost of the phone - $300 above. And they can get the salvage value for the phone.

It works for people who always want the newest phone.

It works for people who hold onto their phone for four years since they do not have to pay for it forever as they do today.

The subsidy pusher/junkie pattern with mobile phone ownership has certainly set a strange precedent. We don't buy our computers from our ISPs, yet we've been conditioned to do so with handsets. So the industry as a whole has established a very short ownship span (partly justified because mobile technology has been advancing quite rapidly, whereas computer technology has slowed down recently.)

Nonetheless, most people don't buy entirely new computers every six months. I imagine when handset technology slows down and people keep them longer, the subsidy model will finally begin to fade. Good riddance.

I want cutting edge service from my phone plan, for a reasonable price.

I don't see how Verizon could push more phone upgrades without raising the monthly rate of service, as seems to be indicated in the article. As one mildly offended by the size of my existing monthly bill, cheaper services such as Republic Wireless or Ting are starting to sound quite appealing.

2 years ago ATT lied to America stating that if ATT were not allowed to swallow up T-Mobile, not only would their own LTE rollout be hampered due to spectrum shortages, but T-Mobile wouldn't be able to deploy LTE and the industry as a whole would suffer. Verizon Wireless supported ATT's position, as it would all but ensure a duopoly of the two largest carriers dictating industry policy and pricing.

2 years later and T-Mobile is rolling out LTE at a steady pace, ATT is ahead of schedule on their LTE network, ATT is refarming their spectrum for more efficient usage, Verizon is following T-Mobile's lead in trying to make their customers happy for once, Sprint is putting their iDen spectrum to good use, and competition is in full force.

All in all, our wireless industry are better stewards of our public goods (spectrum) and there is more diversity in the marketplace *due to* government intrusion.

Go figure.

Although the price to take part in 'VZ Edge' no doubt will benefit VZW heavily (considering they *just* bumped up their standard upgrade cycle from 22 to 24 months), i'm still glad to see Verizon is attempting to listen to their most profitable customers once in a while.

The subsidy pusher/junkie pattern with mobile phone ownership has certainly set a strange precedent. We don't buy our computers from our ISPs, yet we've been conditioned to do so with handsets.

You can take your computer between ISPs, but you cant take your phone between most US carriers!

AT&T phones wont work on T-Mobile in many places because the block WCDMA on AWS on their handsets, phones on T-Mo or AT&T wont work on Verizon or Sprint, CDMA phones aren't portable between Verizon and Sprint, LTE bands are fragmented enough that an AT&T LTE phone wont work on Verizon's or Sprint's LTE networks, but will work on T-Mobile's LTE network, and Verizon and Sprint LTE devices cant use LTE on other networks.

Thats why we buy our phones from the carrier, because we don't have one phone than can run on all networks.

What effect will these trends have on mobile OS marketshare, given that customers might be willing to give alternate OS' a shot since they do not have to stick with it if they don't like it?

I think there's a chance it could hurt Apple, especially given how infrequently they release new iPhones compared to Android handset makers. It could also benefit Windows Mobile or other potential newcomers.

On the other hand, most wireless providers nowadays allow you to return or exchange a new phone within 30 days of purchase, so this strategy could have been used in the past. However, now it might be more appealing to certain people.

Thats why we buy our phones from the carrier, because we don't have one phone than can run on all networks.

Trust me. If the phones were being sold by retailers, and not by carriers, every phone would run on every network... either directly or via radio modules to let you switch carriers as easily as you switch Internet providers.

What effect will these trends have on mobile OS marketshare, given that customers might be willing to give alternate OS' a shot since they do not have to stick with it if they don't like it?

I think there's a chance it could hurt Apple, especially given how infrequently they release new iPhones compared to Android handset makers. It could also benefit Windows Mobile or other potential newcomers.

On the contrary: if you're the kind of user Apple likes, you're not going to leave because you've already got hundreds of $$ invested in apps. If you're NOT the kind of user Apple likes, and all you do with your phone is calls and maps, then why does it matter? They've already got your money. They don't care if you buy an Android 6 months from now... as long as you consider the iPhone 6 when it comes up.

This is only GOOD for handset makers. It will sell more handsets. That makes them more money. They like money.

Am I double paying for the phone..or does the service drop in price to show the true cost of the device?

I have a feeling this is just a way to raise prices of service by forcing the subsidy of the phone onto the customer. The share everything plan wont get any cheaper.

My guess: you pay the same prices as now if you buy a phone every 2 years. If you buy a phone every year, the subsidy drops by about half. (So instead of $350 off, you'll get like $175 off.)

Under the current model, there's a 23 month window where upgrading is impossible. You can't upgrade a year in at $150 off or 23 months in at $300 off. It's all or nothing - and that has always been unfair to consumers.

Under the new model, your upgrade price will scale based on how long you've had your old device, and if you need to upgrade a year in to the contract, you'll just get a new phone - with about half of the normal subsidy.

I have a better idea: knock 40% off the "retail" price and just let people pay the price on the sticker.

The price of smartphone-like devices have been consistently going down over the last few years: I bought a 32GB, cellular-enabled Nexus 7 for $300, and yet my Galaxy S4 retails for $700.

When I compare the price of on and off-contract devices, I can only come to the conclusion that handset prices have been kept artificially high at the expense of the consumer. If you were actually paying what the device is worth, you'd probably be paying about $400 for a device like the SGS4.

If $400 is still too much, then extend financing to credit-worthy consumers and call it what it is: a loan. Once the loan is paid off, drop the loan payment off the bill.

It's not quite as directly comparable as that but yeah, there's a reason why iphone/galaxy s profits are so high.

If big red would allow me to keep unlimited data I might have got excited over this rather than be waiting to switch to the magenta carrier as soon as the new nexus phone comes out.

Pretty much this. The last people get new phones at the end of Unlimited Data will be coming up for their two year contract renewal in less than a year.

Verizon has been calling me and pushing me to "review my plan" to "see how much I would save" as a ploy to pry my fingers away from that Unlimited plan.

At the same time, they took their already restrictive upgrade policy and jacked it out the maximum-- 24 months, no sooner for ANY price break on an upgrade-- and if I go for that, I'm stuck with the full retail price AND a subsidy.

This is an attention ploy to divert attention away from their recent bullshit policies with pricing plans and data caps-- not to mention that their phone exclusives lately have been lackluster at best.

I have a better idea: knock 40% off the "retail" price and just let people pay the price on the sticker.

The price of smartphone-like devices have been consistently going down over the last few years: I bought a 32GB, cellular-enabled Nexus 7 for $300, and yet my Galaxy S4 retails for $700.

When I compare the price of on and off-contract devices, I can only come to the conclusion that handset prices have been kept artificially high at the expense of the consumer. If you were actually paying what the device is worth, you'd probably be paying about $400 for a device like the SGS4.

If $400 is still too much, then extend financing to credit-worthy consumers and call it what it is: a loan. Once the loan is paid off, drop the loan payment off the bill.

If phones weren't subsidized by the carriers (Since Apple, et al. charge them a kings ransom) they would be so darned cheap that buying a newer model more often wouldn't be a problem for the average consumer.

I mean come on... $600 for an iPhone? Doesn't a Macbook Air start at ~$900? I feel that there is some serious gouging going on here.

I mean come on... $600 for an iPhone? Doesn't a Macbook Air start at ~$900? I feel that there is some serious gouging going on here.

Miniaturization costs money. The price goes up the tinier you try to make something complex.

The price curve starts high with extreme miniaturization, then drops as the components require less precision, but then rises again when material costs start to matter. This has always been true with electronics and many other consumer goods (especially those that depend heavily on mechanisms).

If phones weren't subsidized by the carriers (Since Apple, et al. charge them a kings ransom) they would be so darned cheap that buying a newer model more often wouldn't be a problem for the average consumer.

I mean come on... $600 for an iPhone? Doesn't a Macbook Air start at ~$900? I feel that there is some serious gouging going on here.

Certainly Apple margins are healthy on all their products. I'm also not sure what you mean by "gouging". I've never really understood that term in the context of discretionary spending. Don't like the price? Go somewhere else.

However, that's not the big point I wanted to make. Rather, why do you think the fact that a MBA starting at about $900 makes an iPhone 5 at $600 unreasonable? High-end smartphones are among the most amazing consumer technology I can think of and a crap load of really sophisticated engineering is required to create one. Just consider that high-end smartphones have multi-band cellular radios that can communicate with towers miles away, multiple microphones and speakers; they have GPS radios, MEMS multi-axial inertial sensors (many have other types of sensors also), two cameras (one of which is reasonably high-resolution) with video, some pretty amazing high resolution multi-touch screens, WiFi (many dual-band now). They have multicore processors and GPU's that outstrip last generation gaming consoles, gigabytes of RAM, and 16GB-64GB of solid state memory. All of this has to fit in a package that is reliable, rugged, and low power enough to last all day and will comfortably fit into your pocket. Then there's all the software too. That's pretty damned amazing and compared to engineering one of these, a desktop or laptop is a piece of cake.

This is cool and all, but I don't find myself buying the newest netbook every couple of months so I'm not the type of person to buy the "latest and greatest" phone every few months. I feel this plan will end up being even more expensive than the crap ones already available. Honestly, it's not worth it until you get completely unlimited data. Combine unlimited data with the (I think) largest 4G LTE network and best coverage and I'll actually stop living off my parents and buy my own plan.

Just consider that high-end smartphones have multi-band cellular radios that can communicate with towers miles away, multiple microphones and speakers; they have GPS radios, MEMS multi-axial inertial sensors (many have other types of sensors also), two cameras (one of which is reasonably high-resolution) with video, some pretty amazing high resolution multi-touch screens, WiFi (many dual-band now). They have multicore processors and GPU's that outstrip last generation gaming consoles, gigabytes of RAM, and 16GB-64GB of solid state memory. All of this has to fit in a package that is reliable, rugged, and low power enough to last all day and will comfortably fit into your pocket.

If phones weren't subsidized by the carriers (Since Apple, et al. charge them a kings ransom) they would be so darned cheap that buying a newer model more often wouldn't be a problem for the average consumer.

I mean come on... $600 for an iPhone? Doesn't a Macbook Air start at ~$900? I feel that there is some serious gouging going on here.

Certainly Apple margins are healthy on all their products. I'm also not sure what you mean by "gouging". I've never really understood that term in the context of discretionary spending. Don't like the price? Go somewhere else.

However, that's not the big point I wanted to make. Rather, why do you think the fact that a MBA starting at about $900 makes an iPhone 5 at $600 unreasonable?

Because their competitors put the exact same stuff (in terms of objects, not specs) into their phones and sell them for even cheaper. Apple's prices are inflated. They always have been and always will be as long as they keep their Mac OS to themselves. If Apple wasn't the only manufacturer producing for the iOS or Mac OS, I guarantee their prices would be lower. But since they monopolize, they can set whatever price they want and cram it down our throats.

Florence Ion / Florence was a former Reviews Editor at Ars, with a focus on Android, gadgets, and essential gear. She received a degree in journalism from San Francisco State University and lives in the Bay Area.